SBI Hikes Home Loan Rates by 25 BPS, Affecting EMIs and Loan Tenures

State Bank of India (SBI) has increased its benchmark lending rates by 25 basis points (bps), effective October 15, 2026. This revision will lead to higher borrowing costs for home loan customers whose interest rates are linked to these benchmarks. The External Benchmark Linked Rate (EBLR) is now set at 8.15%, up from the previous 7.90%, with applicable Credit Risk Premium (CRP) and Business Strategy Premium (BSP) also factoring into the final rate.

For existing borrowers, the impact will vary based on their loan agreement, outstanding principal, remaining repayment period, and applicable spread. According to Bankbazaar data, a borrower with a ₹50 lakh home loan over a 20-year period at an assumed 8% interest rate would have paid a monthly EMI of approximately ₹41,822 before the hike. With the rate rising to 8.25%, if the original tenure remains unchanged, the EMI would increase to roughly ₹42,603, an additional ₹781 per month.

For a larger loan of ₹1 crore, the monthly EMI could rise by approximately ₹1,563. Over a 20-year period, this would translate to an additional interest payable of around ₹3.75 lakh. Borrowers have two primary options to manage this increase: either accept the higher monthly EMI or extend their loan tenure.

Choosing to keep the monthly EMI unchanged means extending the repayment period, which can significantly increase the total interest paid over the life of the loan. For instance, a ₹50 lakh home loan borrower who opts to maintain their ₹41,822 EMI, instead of increasing it to ₹42,603, might see their tenure extend to 21 years. This extension would result in an additional interest cost of approximately ₹4.96 lakh. While keeping the EMI constant may ease immediate monthly budget pressure, it generally leads to a higher overall interest outlay. Borrowers are advised to check SBI’s official website for the latest rates and conditions, as these calculations are for illustrative purposes.

Editor's note: Comprehensive coverage of the SBI interest rate hike and its financial implications, staying very faithful to the source text.